H.R.1798 - End Tobacco Loopholes Act (119th Congress)
Summary
H.R.1798, the "End Tobacco Loopholes Act," aims to amend the Internal Revenue Code of 1986 to establish tax rate parity among all tobacco products, including cigarettes, roll-your-own tobacco, pipe tobacco, smokeless tobacco, and cigars. It also imposes a tax on nicotine used in vaping products and adjusts tax rates for inflation after 2026. The bill includes floor stocks taxes on tobacco products held for sale on the date of any tax increase.
Expected Effects
The likely effect of this bill is increased tax revenue for the government due to higher excise taxes on tobacco and nicotine products. This could also lead to decreased consumption of these products due to higher prices. The bill also aims to close existing tax loopholes and create a more equitable tax structure across different tobacco products.
Potential Benefits
- Increased tax revenue could be used to fund public health programs or reduce the national debt.
- Higher prices for tobacco products may discourage smoking and vaping, leading to improved public health outcomes.
- The bill aims to create a fairer tax system by eliminating loopholes and ensuring all tobacco products are taxed at a similar rate.
- The inflation adjustment ensures that tax rates keep pace with rising costs, maintaining the real value of the tax.
- The bill could reduce healthcare costs associated with tobacco-related illnesses.
Most Benefited Areas:
Potential Disadvantages
- Increased taxes on tobacco products could disproportionately affect low-income individuals who are more likely to use these products.
- The bill could lead to job losses in the tobacco industry, particularly for manufacturers and retailers.
- Higher prices could incentivize consumers to purchase tobacco products from the black market or across state lines to avoid taxes.
- The floor stocks taxes could create administrative burdens for businesses holding tobacco products on the date of any tax increase.
- The tax on nicotine used in vaping products could harm the vaping industry and reduce the availability of potentially less harmful alternatives to cigarettes.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the constitutional power of Congress to levy taxes, as granted by Article I, Section 8, Clause 1. The bill does not appear to infringe upon any specific constitutional rights or freedoms. The power to regulate commerce, including the taxation of goods, is a well-established federal prerogative.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).